What does the term "loss mitigation" refer to?

The term "loss mitigation" refers specifically to actions taken to prevent further damage after a loss has occurred. This can include a variety of measures, such as securing a property to avoid additional harm following a fire, water damage, or other incidents. The focus of loss mitigation is on minimizing the impact of a loss and protecting any remaining assets, which is crucial in the insurance context as it helps in reducing overall claim costs and improving outcomes for both the insurer and the insured.

Measures associated with loss mitigation are often mandated by insurance policies, as insurers expect policyholders to take reasonable steps to limit additional losses following the initial incident. This responsibility not only helps in managing the claims process more efficiently but also plays a significant role in the overall risk assessment by the insurer.

The other choices, while related to claims and insurance processes, do not define loss mitigation accurately. Assessing claims after they are filed pertains to the evaluation of losses for determination of payout. Calculating insurance premiums involves risk assessment and pricing for coverage, whereas negotiating settlements with claimants relates to the conclusion of a claim rather than the preventative measures taken immediately following an incident.